Fresno spanking-at-work case back in court

More than four years after she won her sexual harassment case for enduring spankings at work, a Clovis woman is still waiting to get paid.

So Janet Orlando returns to court today, suing her former employer for the $1.4 million it agreed to pay when it settled the case.

What seemed like a deal in 2006 has become tangled. Two years ago, the 5th District Court of Appeal in Fresno ordered a new trial; no date has been set. And now Orlando's former employer, Alarm One Inc., is arguing that it doesn't have to pay her and her attorney, Nicholas "Butch" Wagner -- not because of the appellate ruling, but because the terms of its agreement didn't come to pass.

This week's case in Fresno County Superior Court will focus on that agreement, signed July 31, 2006, three months after a jury ruled in Orlando's favor.

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In pre-trial motions Monday, lawyers for Alarm One, Carolina Casualty Insurance and Monitor Liability Managers, Inc., told Judge Donald S. Black that their clients didn't breach the contract. The agreement, the lawyers said, was signed on the condition that banks would lend Alarm One money to pay part of the settlement.

Alarm One never obtained a loan, so the agreement is not valid, the lawyers said.

Wagner said the appellate court's ruling for a new trial doesn't affect the breach of contract lawsuit, because the settlement agreement was not contingent on the appeal.

Another Fresno attorney with experience in big-money cases, Warren Paboojian, said settlements are typically reached in those cases to make sure the plaintiffs get paid and to save the defendant the cost of hiring an appellate lawyer.

Plaintiffs seek settlements because the trial judge can reduce the jury's verdict, or the defendant can file an appeal, which normally would freeze the judgment for years until the higher court makes a ruling, said Paboojian, who is not part of the Orlando case.

For example, a judge in February 2008 cut Stacy Johnson-Klein's gender-discrimination jury award by nearly two-thirds, telling the former Fresno State women's basketball coach to accept $6.6 million or face another trial.

In a 61-page ruling in that case, Black said the jury had ample evidence to justify its unanimous decision that Fresno State had wrongfully fired Johnson-Klein nearly three years earlier. But he said the jury's $19.1 million award -- in particular $14 million for past and future emotional distress -- was excessive.

Paboojian, who represented Johnson-Klein, said, his client ended up taking a figure lower than the jury's verdict, but at least she got paid.

He said Orlando might have trouble getting what she's asking for. "Rarely, do million-dollar verdicts get paid in full," he said.

Orlando was a saleswoman for Alarm One, a home-security company, for five months in late 2002 and early 2003. She said she quit her job after she was humiliated by company practices that included spanking employees with a competitor's yard sign -- all in the name of helping build camaraderie among the company's sales force.

In an April 2006 trial in Fresno County Superior Court, she alleged sexual harassment, assault, battery and infliction of emotional distress.

Alarm One employees testified that they often competed in team-building exercises that included throwing pies at one another, feeding each other baby food, wearing diapers and swatting each other's buttocks with yard signs. During the spankings, employees hooted and shouted lewd comments such as, "bend over, baby," and, "you've been a bad girl," according to the testimony.

Company supervisors, who often administered the spankings, testified that Orlando was a willing participant in the team-building exercises and that she never complained about being spanked. They said she quit because she was passed over for a promotion.

Corporate officials put an end to the practices in early 2004 after other employees complained about the spankings.

After the jury sided with Orlando and awarded her $1.7 million, she gained instant fame. Days after the verdict, she and Wagner hit the road to appear on ABC's "Good Morning America," the TV magazine "Inside Edition," the "Catherine Crier Live" show on Court TV, and Fox News' "Your World with Neil Cavuto."

When Alarm One filed an appeal, Orlando and Wagner agreed to settle the case for $1.4 million.

The case became further complicated in January 2008, when the 5th District Court of Appeal in Fresno dismissed the initial judgment. Appellate justices said the key issue should not have been whether Orlando was spanked; rather the jury should have been instructed to find out whether Orlando was spanked because she's a woman. The appellate court ordered a new trial.

Outside court Monday, attorney Larry Artenian, who represents Orlando and Wagner, said that if his clients prevail in Black's courtroom, there will be no need for a new trial. But if they lose, they can retry the initial spanking lawsuit, he said.

Orlando, now 59, and Wagner, as well as the other people who negotiated and signed the agreement, are scheduled to testify. The trial is expected to last up to eight days.